Sunday, May 28, 2000
Open-air malls not foolproof
But payoff can be lower costs, higher customer traffic
By Lisa Biank Fasig
The Cincinnati Enquirer
LAS VEGAS There's been a lot of noise in the retail industry about the potential of so-called open-air malls, those centers that combine higher-end merchants with entertainment in the hearts of thriving communities.
ROOKWOOD COMMONS IS SET TO OPEN IN NORWOOD THIS SUMMER|
(Tony Jones photo)
| ZOOM |
But one the nation's most ubiquitous retailers warned that developers should be careful not to go overboard.
The danger of creating a center that does not match the immediate market is greater than with a traditional mall, Scott Olivet, senior vice president of real estate for the Gap Inc., cautioned while speaking to developers and retailers Monday. Be focused. This is a strategy that's an infill, it's a substitute, it's filling a new need.
Mr. Olivet's advice came at the International Council of Shopping Center's spring convention here last week, during a session discussing the advantages of open-air centers vs. traditional enclosed malls. These advantages such as lower costs and higher traffic are not lost on Cincinnati developers: in the past year, three open-air projects have been announced.
The most advanced, Rookwood Commons, will open in Norwood in August and include a Bed, Bath & Beyond, Banana Republic, Anthropologie and Wild Oats grocery store.
A second, Village Crossing at West Chester, is being developed by Madison Marquette Realty and will include Jacobson's as one of three anchors. According to literature provided at the show by Madison Marquette, it also will include a 16-screen Showcase Cinema Theater, a community center and a large home furniture retailer.
Nearby, a third open-air center, Union Town Centre, developed by Continental Real Estate of Columbus, will combine retail, residential and office space.
There are several reasons for sudden interest in these open-air, or lifestyle, centers. For retailers, they are cheaper to occupy and maintain than traditional malls, and they offer a new avenue for expansion. For shoppers, open-air centers pledge to offer a more convenient experience.
Lewis Stirling, whose Stirling Properties of New Orleans develops major open-air centers in Louisiana, said his firm's research has produced beguiling figures. Sales per square foot at upper-end outdoor centers can run to $400 to $500 a square foot, equivalent to a top-tier mall. The costs for tenants at open-air malls are 60 percent lower and store volume is 30 percent to 40 percent higher, he said.
But these centers also require crucial elements to exist: the right demographics for the finely selected mix of retail; the right tenant mix for that community; and a location with easy access.
They really need to fit into the community, said Albert Corti, principal of the Corti Gilchrist Partnership, developers in San Diego. You've got to build it close to the rooftops.
Corti Gilchrist is in the midst of a 26-block multi-use redevelopment project in downtown San Diego, tied to the city's new ballpark, which is under construction. Mr. Olivet's warning seemed well-received, though it might not slow developers they are in the business of building, after all.
In Greater Cincinnati, mall builders are focusing on some of the area's most select communities. Rookwood Commons, near well-to-do Hyde Park and East Walnut Hills, will offer a defined selection of destination retailers. And West Chester is among the fastest-growing regions of Cincinnati, with an estimated trade area of 495,000 in 1999. The average household income in the five-mile radius around Village Crossing is $72,000.
New day for old-line law firm
Open-air malls not foolproof
Brownies took photos of a century
BYCZKOWSKI: Web readiness
From Vietnam with ambition, discipline
What's the Buzz?
What's in a Net name? Everything
Wires, software weave Net's mesh